Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to_____________. Commission File Number: 001-34780 FORWARD INDUSTRIES, INC. (Exact name of registrant as specified in its charter) (State or other ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 Commission file number 001-34780 FORWARD INDUSTRIES, INC. OR (Exact name of registrant as specified in its charter) o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ 700 Veterans Memoria ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides a comprehensive overview of the company's financial performance and position for the period ended March 31, 2022 [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Total assets increased to **$22.0 million**, liabilities to **$14.6 million**, with six-month revenues of **$21.9 million** and a net loss of **$176,311** [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Items (in USD) | Balance Sheet Items | March 31, 2022 (Unaudited) | September 30, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $14,940,817 | $12,794,709 | | Inventories, net | $3,897,479 | $2,062,557 | | **Total Assets** | **$21,973,187** | **$19,855,539** | | **Total Current Liabilities** | $11,042,179 | $7,208,043 | | Due to Forward China | $7,239,885 | $5,733,708 | | **Total Liabilities** | **$14,601,243** | **$12,412,096** | | **Total Shareholders' Equity** | **$7,371,944** | **$7,443,443** | - Total assets increased by approximately **$2.1 million**, largely driven by an **$1.8 million** increase in inventories[9](index=9&type=chunk) - Total liabilities rose by **$2.2 million**, mainly due to a **$1.5 million** increase in amounts due to Forward China and a **$1.5 million** note payable to Forward China becoming a current liability[9](index=9&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statements of Operations (in USD) | Metric | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Six Months Ended Mar 31, 2022 | Six Months Ended Mar 31, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Revenues, net** | $10,314,563 | $8,395,379 | $21,928,304 | $18,112,982 | | **Gross Profit** | $2,252,674 | $1,743,446 | $4,871,443 | $4,006,332 | | **Loss from Operations** | ($322,739) | ($816,176) | ($108,525) | ($983,669) | | **Net (Loss)/Income** | **($356,335)** | **($834,728)** | **($176,311)** | **$364,308** | | **Basic (Loss)/EPS** | ($0.04) | ($0.08) | ($0.02) | $0.04 | | **Diluted (Loss)/EPS** | ($0.04) | ($0.08) | ($0.02) | $0.04 | - For the six months ended March 31, 2021, net income was significantly impacted by a **$1,356,570** gain on the forgiveness of a note payable (PPP loan), which did not recur in the 2022 period[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Statements of Cash Flows (in USD) | Cash Flow Activity (Six Months Ended March 31) | 2022 | 2021 | | :--- | :--- | :--- | | **Net cash provided by/(used in) operating activities** | $360,327 | ($397,918) | | **Net cash used in investing activities** | ($129,500) | ($37,878) | | **Net cash used in financing activities** | ($100,000) | ($959,666) | | **Net increase/(decrease) in cash** | $130,827 | ($1,395,462) | | **Cash at end of period** | $1,541,192 | $1,529,165 | - The shift to positive cash flow from operations in the 2022 period was primarily driven by an increase in accounts payable and amounts due to Forward China, which offset a significant increase in inventories[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company operates in three reportable segments: OEM distribution, retail distribution, and design, with the design segment including the aggregated results of IPS and Kablooe[31](index=31&type=chunk) - The COVID-19 pandemic continues to impact the business through increased freight costs, transportation delays, and rising labor costs due to inflation, with these effects expected to continue through Fiscal 2022[22](index=22&type=chunk)[23](index=23&type=chunk) - The company has a significant related-party relationship with Forward China, owned by the company's CEO, which acts as the exclusive buying agent and supplier and is also a lender to the company[72](index=72&type=chunk) - For the six months ended March 31, 2022, two customers in the OEM distribution segment accounted for **25.7%** of consolidated revenues, and one customer in the design segment accounted for **10.2%**[60](index=60&type=chunk)[62](index=62&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses revenue growth across segments, improved gross margin, and liquidity, noting reliance on a related party for financial support [Results of Operations for the Three Months Ended March 31, 2022](index=20&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202022) Results of Operations (in USD) | Metric | Q2 2022 | Q2 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Revenues, net** | $10,315,000 | $8,395,000 | $1,920,000 | 22.9% | | **Gross Profit** | $2,252,000 | $1,743,000 | $509,000 | 29.2% | | **Loss from Operations** | ($323,000) | ($816,000) | $493,000 | (60.4%) | | **Net Loss** | ($356,000) | ($835,000) | $479,000 | (57.4%) | - Revenue growth was driven by all segments: OEM Distribution revenue increased by **$422,000 (9.9%)**, Retail Distribution by **$420,000 (183.4%)**, and Design by **$1,078,000 (27.6%)**[103](index=103&type=chunk) - The Design segment's operating income improved significantly to **$389,000** from a loss of **($288,000)** in the prior-year quarter, driven by higher revenues, better utilization, and lower bad debt expense[103](index=103&type=chunk)[115](index=115&type=chunk) [Results of Operations for the Six Months Ended March 31, 2022](index=23&type=section&id=Results%20of%20Operations%20for%20the%20Six%20Months%20Ended%20March%2031%2C%202022) Results of Operations (in USD) | Metric | Six Months 2022 | Six Months 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Revenues, net** | $21,928,000 | $18,113,000 | $3,815,000 | 21.1% | | **Gross Profit** | $4,871,000 | $4,006,000 | $865,000 | 21.6% | | **Loss from Operations** | ($109,000) | ($984,000) | $875,000 | (88.9%) | | **Net (Loss)/Income** | ($176,000) | $364,000 | ($540,000) | (148.4%) | - The significant decrease in net income is primarily due to the non-recurrence of a **$1,357,000** gain from PPP loan forgiveness that was recognized in the 2021 period[121](index=121&type=chunk)[122](index=122&type=chunk) - By segment, revenue growth for the six-month period was led by Retail Distribution (up **228.6%** to **$2.0 million**) and Design (up **24.2%** to **$10.0 million**), with OEM Distribution growing more modestly (up **4.8%** to **$9.9 million**)[125](index=125&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) - Working capital decreased to **$3.9 million** at March 31, 2022, from **$5.6 million** at September 30, 2021, mainly because a **$1.5 million** note payable to Forward China was reclassified as a current liability[138](index=138&type=chunk) - As of April 30, 2022, the company had **$1.9 million** in cash and **$1.3 million** available under its line of credit; management plans to repay a **$1.5 million** promissory note due December 31, 2022, using existing cash or a new credit facility[139](index=139&type=chunk) - The company acknowledges its reliance on Forward China, a related party, for extending the maturity of its promissory note and providing flexible payment terms on payables to support its liquidity[139](index=139&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states this item is not applicable, indicating no material market risk exposures requiring disclosure - The company states this section is 'Not applicable'[147](index=147&type=chunk) [Item 4. Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed the effectiveness of disclosure controls and procedures, with no material changes to internal controls during the quarter - Management concluded that the company's disclosure controls and procedures are effective as of the end of the period covered by the report[148](index=148&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[149](index=149&type=chunk) [PART II. OTHER INFORMATION](index=28&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, and other miscellaneous items, including equity sales and exhibit listings [Item 1. Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) A patent dispute involving a subsidiary was dismissed, and no other material legal actions are pending against the company - In January 2022, all claims in a patent dispute case involving the company's subsidiary, IPS, were dismissed without prejudice[153](index=153&type=chunk) - As of March 31, 2022, there were no other material legal actions or proceedings against the company[154](index=154&type=chunk) [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) The company reports no material changes to the risk factors previously disclosed in its latest annual report - The company reports no material changes in its risk factors from those disclosed in its Form 10-K for the fiscal year ended September 30, 2021[155](index=155&type=chunk) [Other Items (Items 2, 3, 4, 5, 6)](index=28&type=section&id=Other%20Items) No unregistered equity sales or defaults on senior securities were reported, with other items marked as not applicable - Item 2: No unregistered sales of equity securities were reported for the three months ended March 31, 2022[156](index=156&type=chunk) - Item 3 & 4: The company reported no defaults upon senior securities and that mine safety disclosures are not applicable[157](index=157&type=chunk)[158](index=158&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number 001-34780 FORWARD INDUSTRIES, INC. (Exact name of registrant as specified in its charter ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to_____________. Commission File Number: 001-34780 FORWARD INDUSTRIES, INC. (Exact name of registrant as specified in its charter) New York 13-195 ...

Table of Contents For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number 001-34780 FORWARD INDUSTRIES, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FO ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number 001-34780 FORWARD INDUSTRIES, INC. (Exact name of registrant as specified in its charter) N ...

FORM 10-Q þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2020 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number 001-34780 FORWARD INDUSTRIES, INC. (Exact name of registrant as specified in its charter ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2020 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-34780 FORWARD INDUSTRIES, INC. (Exact name of registrant as specified in its charter) New York 13-1950672 (State or other juris ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Forward Industries, Inc.'s unaudited condensed consolidated financial statements for the periods ended June 30, 2020, detailing financial position, performance, and cash flows [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2020, total assets increased to **$18.64 million** and liabilities to **$12.46 million** primarily due to new lease accounting standards and a PPP loan, while shareholders' equity decreased to **$6.18 million** due to net losses Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2020 (Unaudited) | September 30, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Total current assets | $12,580 | $11,838 | | Goodwill | $1,167 | $2,182 | | Operating lease right of use assets, net | $3,409 | $– | | **Total assets** | **$18,640** | **$16,094** | | **Liabilities & Equity** | | | | Total current liabilities | $8,404 | $8,296 | | Operating lease liability, less current portion | $3,279 | $– | | **Total liabilities** | **$12,458** | **$8,383** | | **Total shareholders' equity** | **$6,182** | **$7,711** | - Goodwill decreased by **$1.015 million** due to an impairment charge recorded during the period[10](index=10&type=chunk)[62](index=62&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the nine months ended June 30, 2020, the company reported a net loss of **$1.67 million** on revenues of **$25.87 million**, including a **$1.015 million** goodwill impairment, while Q3 revenues decreased to **$9.55 million** with a widened net loss Statement of Operations Summary (in thousands, except per share data) | Metric | Nine Months Ended June 30, 2020 | Nine Months Ended June 30, 2019 | | :--- | :--- | :--- | | Revenues, net | $25,873 | $28,265 | | Gross profit | $4,948 | $4,508 | | Goodwill impairment | $1,015 | $– | | Loss from operations | $(1,871) | $(1,605) | | Net loss | $(1,668) | $(1,765) | | Net loss per share (Basic & Diluted) | $(0.18) | $(0.19) | Q3 Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | | :--- | :--- | :--- | | Revenues, net | $9,549 | $9,909 | | Gross profit | $1,775 | $1,894 | | Loss from operations | $(175) | $(50) | | Net loss | $(215) | $(104) | | Net loss per share (Basic & Diluted) | $(0.02) | $(0.01) | [Condensed Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Shareholders' equity declined from **$7.71 million** to **$6.18 million** by June 30, 2020, primarily due to a **$1.67 million** cumulative net loss over the nine-month period - Total shareholders' equity decreased by approximately **$1.53 million** over the nine-month period ended June 30, 2020, from $7,711,299 to $6,181,943[15](index=15&type=chunk) - The accumulated deficit increased from **$(11,320,169)** to **$(12,988,642)** during the nine months ended June 30, 2020, reflecting the period's net losses[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended June 30, 2020, net cash used in operating activities improved to **$760,000**, while financing activities provided **$808,000** primarily from a **$1.36 million** PPP loan, resulting in a minimal net decrease in cash Cash Flow Summary (in thousands) | Activity | Nine Months Ended June 30, 2020 | Nine Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(760) | $(2,201) | | Net cash used in investing activities | $(56) | $(30) | | Net cash provided by financing activities | $808 | $570 | | **Net decrease in cash** | **$(8)** | **$(1,660)** | | Cash at end of period | $3,085 | $2,710 | - The company received **$1,356,570** in proceeds from a PPP loan during the nine months ended June 30, 2020[17](index=17&type=chunk)[99](index=99&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail the company's business, the significant impact of COVID-19, a **$1.015 million** goodwill impairment, segment performance, and key financial policies including a new PPP loan and related party transactions - The COVID-19 pandemic disrupted the supply chain, delayed product rollouts, and reduced demand for design services, impacting revenues; the company received a **$1.357 million** PPP loan to mitigate liquidity impacts[22](index=22&type=chunk) - The company recorded a goodwill impairment charge of **$1,015,000** for its IPS reporting unit during the three months ended March 31, 2020, due to revised revenue projections and other triggering events[62](index=62&type=chunk) - The company has a significant related-party relationship with Forward China, owned by CEO Terence Wise, for sourcing products and has a **$1.6 million** promissory note payable to them[90](index=90&type=chunk)[91](index=91&type=chunk) - Subsequent to the quarter end, the company entered into a non-binding letter of intent to acquire a design-development company focused on the medical industry for approximately **$1.5 million**[110](index=110&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's performance for the three and nine months ended June 30, 2020, highlighting the negative impact of COVID-19, a **$1.015 million** goodwill impairment, and liquidity supported by a **$1.36 million** PPP loan [Results of Operations - Three Months Ended June 30, 2020 vs 2019](index=27&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended%20June%2030,%202020%20vs%202019) Q3 2020 consolidated net revenues decreased **3.6%** to **$9.55 million**, with Distribution segment revenue growing **6.1%** due to PPE sales, while Design segment revenue fell **18.7%** due to COVID-19 impacts, widening the net loss Q3 Segment Performance (in thousands) | Segment | Q3 2020 Revenue | Q3 2019 Revenue | Change | Q3 2020 Gross Profit | Q3 2019 Gross Profit | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Distribution | $6,389 | $6,022 | +6.1% | $939 | $921 | +2.0% | | Design | $3,160 | $3,887 | -18.7% | $836 | $973 | -14.1% | | **Total** | **$9,549** | **$9,909** | **-3.6%** | **$1,775** | **$1,894** | **-6.3%** | - Distribution segment's 'Other Product Revenues' increased by **$915,000**, primarily due to the sale of **$758,000** in personal protective equipment (PPE)[133](index=133&type=chunk) - Revenues from diabetic products, a core line for the Distribution segment, declined by **10.1%** or **$548,000** year-over-year due to reduced demand and pricing pressures[130](index=130&type=chunk) [Results of Operations - Nine Months Ended June 30, 2020 vs 2019](index=31&type=section&id=Results%20of%20Operations%20-%20Nine%20Months%20Ended%20June%2030,%202020%20vs%202019) For the nine months ended June 30, 2020, consolidated net revenues decreased **8.5%** to **$25.87 million**, driven by declines in both Distribution (**8.0%**) and Design (**9.2%**) segments, resulting in a **$1.67 million** net loss including a **$1.015 million** goodwill impairment Nine-Month Segment Performance (in thousands) | Segment | 9M 2020 Revenue | 9M 2019 Revenue | Change | 9M 2020 Gross Profit | 9M 2019 Gross Profit | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Distribution | $15,709 | $17,072 | -8.0% | $2,103 | $2,659 | -20.9% | | Design | $10,164 | $11,193 | -9.2% | $2,845 | $1,849 | +53.9% | | **Total** | **$25,873** | **$28,265** | **-8.5%** | **$4,948** | **$4,508** | **+9.8%** | - The Design segment's gross margin improved significantly from **16.5%** in the 2019 period to **28.0%** in the 2020 period, recovering from project overruns in the prior year[156](index=156&type=chunk) - The nine-month results include a **$1,015,000** goodwill impairment and a **$327,000** investment impairment, both impacting the Design segment's operating results[146](index=146&type=chunk)[160](index=160&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) As of June 30, 2020, working capital was **$4.18 million** and cash **$3.08 million**, with liquidity bolstered by a **$1.36 million** PPP loan and a **$1.3 million** line of credit, deemed adequate for the next 12 months - The company received a **$1,357,000** loan under the Paycheck Protection Program (PPP) in April 2020, which it intends to apply for forgiveness on[167](index=167&type=chunk) Working Capital and Liquidity Ratios | Metric | June 30, 2020 | September 30, 2019 | | :--- | :--- | :--- | | Working Capital | $4,176,000 | $3,543,000 | | Current Ratio | 1.5 | 1.4 | | Quick Ratio | 1.4 | 1.2 | - Cash used in operating activities for the nine months ended June 30, 2020 was **$760,000**, a significant improvement from **$2,201,000** used in the same period in 2019[172](index=172&type=chunk)[173](index=173&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable for the company - Not applicable[180](index=180&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of June 30, 2020, with no material changes to internal control over financial reporting beyond those related to ASC 842 adoption - Management concluded that the company's disclosure controls and procedures are effective as of the end of the period covered by the report[181](index=181&type=chunk) - No material changes were made to internal control over financial reporting during the quarter, except for controls related to the adoption of the new lease standard, ASC 842[182](index=182&type=chunk) [PART II. OTHER INFORMATION](index=39&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) As of June 30, 2020, the company was not a party to any legal proceedings that it believes would have a material adverse effect on its business - There were no material legal actions or proceedings against the company as of June 30, 2020[186](index=186&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) The company highlights key risks including the ongoing negative impact of the COVID-19 pandemic on operations and the uncertainty regarding forgiveness of its **$1.357 million** PPP loan - The COVID-19 pandemic has negatively impacted the business by disrupting the supply chain, delaying product rollouts, and increasing the risk of customer inability to pay[187](index=187&type=chunk)[188](index=188&type=chunk) - There is a risk that the company may not be entitled to forgiveness for its **$1.357 million** PPP loan and could be subject to repayment and penalties if the application is deemed impermissible[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - None[192](index=192&type=chunk) [Defaults Upon Senior Securities](index=40&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report for the period - None[193](index=193&type=chunk) [Other Information](index=40&type=section&id=Item%205.%20Other%20Information) There was no other information to report for the period - None[195](index=195&type=chunk) [Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed or incorporated by reference as part of the Form 10-Q, including certifications and XBRL data files - The exhibits listed in the 'Index to Exhibits' are filed or incorporated by reference as part of the Form 10-Q[196](index=196&type=chunk)